Cleveland-based Charter One Financial Inc. says the deal it announced last week to buy Firstfed Michigan Corp. will help it expand its consumer lending - most of which is in home equity loans.

John D. Koch, executive vice president of Charter One, said it plans to grow its consumer-loan assets substantially over the next five years.

Charter One's consumer loans now make up 8% of its assets, Mr. Koch said. He said the bank plans to grow its lending so consumer loans will represent 20% of assets.

And he plans to use Firstfed, Detroit, to amplify the strategy.

"We think we can jump start our retail strategy by aligning them" with Firstfed, Mr. Koch said in a telephone interview.

Charter One announced the Firstfed deal, valued at $1.1 billion, last Tuesday. It would create the fifth-largest publicly traded thrift in the nation.

Charter One is expanding its consumer lending by introducing new products and amplifying its telemarketing operations. Mr. Koch said.

The thrift now has a product that allows homeowners to borrow against all their home equity. And a new unit buys boat loans originated by other lenders.

Charter One also has developed a substantial effort in telemarketing. Instead of staffing a separate telemarketing unit, Charter One has its branch employees make calls to their customers on late afternoons and evenings.

Mr. Koch said the telemarketing will be expanding. Firstfed will provide additional outlets for Charter One's expansion in telemarketing and consumer lending, he said.

"There is not going to be any stuttering," he said. The expansion will quickly include Firstfed, he said.

That's a strategy applauded by some analysts.

"Charter One is going to take their product knowledge and consumer knowledge and run it through Firstfed of Michigan's branches," said Wayne R. Bopp, research analyst, Stifel, Nicolaus & Co., St. Louis. "This is going to be kind of interesting; Charter One is trying to bring Firstfed to where they are."

Firstfed has 63 branches, mostly around Detroit.

Fred A. Cummings, bank analyst, McDonald & Co. Securities, Cleveland, said Firstfed would not provide the merged entity many new products or substantial expertise. But he said Firstfed has a strong franchise in Michigan that has yet to be fully exploited.

Mr. Bopp, of Stifel, Nicholas & Co., said it is Charter One's expertise in consumer lending that will drive its lending relationship with Firstfed. He thought Firstfed would help Charter One accelerate its goal to increase consumer lending.

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